Some current updates on the UK rail franchises

There are many companies operating trains in the United Kingdom. Let’s start with the numbers: companies operating 33 franchises throughout the country receive state subsidies, amounting to 3.6 billion euros, for a total turnover of 14 billion euros, (including subsidies) while their expenditure amounted to 13.66 billion euros. A balanced system, but where the state intervenes anyway. In twenty years, rail traffic has more than doubled to reach 1.718 billion passengers (64.7 billion passenger-km) on the 15,700 km of railway lines. What has changed is that travelers themselves finance 66% of rail costs, up from 44% about 10 years earlier. At the price, it is true, a pricing that seems expensive in the eyes of the public. On the technical side, the smaller gauge of the network (passage under bridges and tunnels, edges of the platforms …) prohibits in Great Britain the use of two-level trains like everywhere in Europe. The sharp increase in traffic means that you often have to travel at rush hour because there are limits to the number of trains per lane, even if the future London Crossrail promises 25 trains per hour…

The franchise system

Preferred targets of the French, who believe they see it as an ultra-liberal instrument, the franchises have a certain resemblance with the delegations of public service to the French, with some legal nuances. Passenger services in Great Britain are divided into 31 regional franchises giving operators monopoly concessions of variable duration (average 10 years) with specific operating conditions, the non-compliance of which results in penalties. Franchises are established on a network of highly composite lines, ranging from urban and suburban transport to intercity and regional links. All contracts are awarded by the Ministry of Transport (DfT) – and not the organizing authorities as in Europe – thus demonstrating that the state retains control over local and regional transport. One exception: ScotRail (Scotland), where the DfT allocates franchises on the advice of the Scottish Government, which thus marks its independence from London. The British system is not a competition on the lines, but a competition to obtain a network to manage in a monopoly for 8 to 15 years. It is a competition “for a market”, as in Germany or elsewhere, except that the decisions are all centralized in London. It should be noted that competition is “total” for rail freight, which is doing very well, benefiting, as in Europe – and in France – from “open access”.

The rail network: Private Company but public property!

The network was initially entrusted to the private company Railtrack. Fatal accidents – only events that hold Europeans- following the failings of this company, led the legislator to return the infrastructure to the fold of the State in 2004 (2). So yes, the current Network Rail is indeed a private company, but 100% in the hands of the British state. No action has so far been sold to anyone, not even Qatar or the Chinese. The 34,000 employees of the company are not in status, which has not prevented the network from being considered the safest network in Europe. The British have no longer known Buizingen (BE), Santiago de Compostela (ES) or Brétigny (FR) for a long time…

The UK has constantly welcomed the Who’s Who of the franchise industry. This relatively privileged situation of the current franchisees in the United Kingdom is attracting more and more entrepreneurs planning to start their businesses as franchisors or franchisees.

Starting a business in the UK

Thousands of fresh businesses are stared in the UK every year. Join them by having enough know-how thanks to our guide on how to start your business. This will depend on a number of things like your field of expertise, your budget, the status you are considering for yourself…